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EncryptoTel crowdsale: update #3. We have come to a solution that we… | by EncryptoTel

EncryptoTel

We have come to a solution that we believe will be mutually acceptable for all parties: buying back and burning a proportion of ETT using the additional funds collected.

After our surprise over-funding at the end of the EncryptoTel crowdsale, we have worked to try to find a solution that keeps as many of our stakeholders as possible happy. Initially, we thought we would conduct a vote to see whether we should return the 1 million WAVES to the investor, and never issue those ETT. However, this has flaws: it imposes a one-size-fits-all solution on the whole community, meaning that it would likely upset almost as many people as it pleased.

A better solution, we believe, is to set a buywall using a proportion of the additional funds. If holders prefer not to remain in the project, they can exit their investment without loss. However, if they decide they would like to stay on board, believing the additional funding to be a benefit to the project, there is no onus on them to do this. Decisions can be made on an individual basis.

Any tokens bought back in this way will be burned, removing them from the market permanently. (Burning is a straightforward matter — the tokens can simply be sent to a provably unspendable address.)

It is not yet clear how many investors will choose to sell their tokens in this way. Initially, we propose to place a buywall of 200,000 WAVES for ETT, using the Waves DEX. This is important for several reasons:

  • The additional investment was made in WAVES, so this is the currency we feel we should use to buy back ETT.
  • We do not want to place this amount of funds on a centralised exchange, where it could be stolen. As a peer-to-peer exchange, the Waves DEX is completely secure.
  • It will be possible to trade tokens on DEX immediately after distribution, without waiting for exchange listing.
  • We want to foster greater adoption for Waves.

We hope that the buywall will prove sufficient to allow dissatisfied investors to exit their stake, whilst instilling confidence for the rest of the market.

The buywall will remain in place for one month after token distribution. Should it become necessary to use more funds to buy back ETT, we will of course consider doing this and will set a buywall of up to another 200,000 WAVES. On the other hand, if ETT trades above the buywall for an extended period of time, we will take this as evidence that holders are, by and large, happy with their investment given the new circumstances.

What do you think?

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